All livestock are assumed to age-up at the end of the financial year – an R1 steer becomes an R2 steer and a ewe hogget becomes a 2th ewe. This article explains the reason why all livestock age up, gives examples and lets you know some handy tips to make sure you age livestock correctly.
Aging livestock at the end of the financial year is an industry-wide concept, used for simplicity and consistency.
Movement in stock numbers, the difference between what you opened with at the start of the year compared to your closing numbers, can also have enormous impacts on your taxable profit.
This means animals need to be aged correctly so they can be re-valued, to give you an accurate view of the position of your business at the end of the financial year.
Cashmanager RURAL doesn’t calculate tax for your business, but your accountant will refer to the closing livestock numbers when they’re preparing your end of year accounts.
It’s not just about tax though.
You’ll find that most farm financial services such as DairyBase, Beef + Lamb NZ, the BakerAg FAB reports, and even your local discussion group, will use a farm’s closing stock numbers and their value to compare against industry standards.
At Cashmanager RURAL we’re all about financial planning and follow industry standards by automatically aging livestock up to the next stock class at midnight on the last day of your financial year.
For example, in physical terms, a ewe lamb born in August 2016 may be considered a ewe hogget around March 2017.
In Cashmanager, it will continue to be classed as a lamb until midnight 30 June 2017, at which point it will age up to a ewe hogget for the next financial year.
How to translate animals in the paddock to your Livestock rec.
When coding transactions or preparing a budget, the rule of thumb is to use the code the animal opened as at the beginning of the financial year.
This may well be different to what the animal is referred to ‘on farm’, but the on farm name can easily be entered into the note/comment section of the transaction in Cashmanager.
For example, at this time of year scanned empty heifers can cause some confusion – should the sale transaction be coded to R1 or R2 heifers in Cashmanager?
A 20-month heifer, sold as empty in April must be coded as R1 heifer, as that is what she opened as at the start of the financial year even though, physically, you may consider her as an R2. We recommend typing a comment such as: ‘MT 20mth Hfrs’.
Another common cause for confusion is lambs that are carried over the winter and sold in early spring. Should the sale transaction be coded to a lamb or trade hogget in Cashmanager?
A trade hogget sold in September may be described on farm or at the works as ‘last year’s lamb’.
The sale must be coded to trade hoggets, as this is what they were at the start of the financial year. You could use ‘last year’s lamb’ as a comment.
Points to remember when aging livestock:
- Keep it simple – Don’t get too detailed with stock classes in your livestock rec. Do you really need to have a code for cull or empty/dry cows or ewes? This can make your livestock rec. confusing and complicated to balance.
- TIP: Use the note field to add physical information about the animal to the stock transaction.
- Stock born on farm – Opening numbers shouldn’t be entered for lambs, calves and fawns. Their births should be recorded using the Born action, detailing the date they were born.
- Aged livestock – All livestock in your farm business will age at the end of your financial year, regardless of when they were born, apart from MA cows, MA ewes and sires.
- Consistent coding – When coding your stock transactions, consider how they are classed in your database as opposed to how they’re physically classed.